The Art and Science Of Corporate Giving

Every year the insurance company NJM gives out around $2 million in charitable donations out of its $1.76 billion revenue. But rather than simply write checks to a few organizations, NJM spreads the money — and ensuing goodwill — around, in increments of as little as $250. The company has an entire corporate giving department, headed up by Mike van Wagner, NJM’s vice president of public affairs. Van Wagner gave U.S. 1 an inside look at the strategy and thought process behind what NJM gives, to whom, and why.

Van Wagner says NJM gives donations all around the state, but pays special attention to organizations in Ewing, its current home, and Trenton, where the company was founded more than 100 years ago. “This is where we’ve always had a focus,” van Wagner says. “We think it’s an important part of our role as a good corporate citizen to support our local communities.” The company gives special focus to higher education, and regularly donates to the College of New Jersey, Rider, Mercer County Community College, and Thomas Edison State University.

Occasionally NJM gives larger donations to capital campaigns, such as the $250,000 it gave last year to Homefront, the Lawrenceville-based anti-poverty organization. But these are unusual, and mostly NJM spreads the money around to many causes. Last year it gave to 600 different groups. In addition to the funds distibuted at the discretion of the corporate giving office, NJM matches up to $1,000 in donations by each of its 2,500 employees.

Van Wagner says that while NJM makes these donations for the good of the community, the company also benefits from its charitable giving. “There is benefit to our employees seeing the company’s corporate giving engagement in their communities,” he says. “It benefits morale. And increasingly for new employees as they look for companies they want to work for, one of the things they want to know is how the company is supporting the community, how it is engaged. People want to know that they’re working for a company that’s a good corporate citizen.”

As a privately held company, however, NJM does not have to justify its charitable giving in terms of shareholder value. “The discussion doesn’t start with ‘what’s the return on investment,’” van Wagner says. “We do it because it’s the right thing to do.”

How NJM decides where it donates. NJM does not have to go looking for good causes: the nonprofits come to NJM. Since everyone knows the company gives to charity, van Wagner’s job consists of choosing among incoming requests. The company has a formal process for reviewing requests, and every month a working group meets to go over them.

Van Wagner says he first looks at the goals of a charity and how it goes about carrying out its mission to see if it aligns with the company’s goals. In NJM’s case, it is especially focused on education and supporting the Trenton and Ewing communities. Within education, it has a special focus on financial literacy programs.

NJM also supports organizations that have ties to the insurance industry, such as hospitals. As an insurer that covers auto and worker’s compensation claims, NJM does a lot of business with hospitals outside of its charitable donations. “They are just naturally aligned with our business, so we do have a relationship with them,” he says.

Van Wagner also asks: does the charity have good governance? Is it effective? How transparent is the organization? Van Wagner does some of this research on Charity Navigator, a website that rates the effectiveness of nonprofit groups and reports how much money they spend on programs versus administration. Because NJM donates only to 501(c)3 charities, he also looks at the publicly available tax documents that those groups file. As a last step he often sees the place in person to have a look at the facilities and get to know what the charity does.

Van Wagner says there is more data available about how effective charities are than ever before. “Over the past 10 years the discipline around measuring outcomes has really matured,” he says. “Most organizations of any size are well equipped to do that. But it’s not just a pure metrics play. There is good and important work being done that is not always immediately transferable to the bottom line, so you have to have a good understanding of what they are doing, what they measure, and how they report.”

Because NJM gets so many requests, van Wagner ends up turning a lot of them down. But the company also supports nonprofits with means other than monetary donations. Every year each NJM employee can take a paid day off to work for a charity. Many use this opportunity to deliver for Meals on Wheels or volunteer for another cause meaningful to them. The company also donates surplus office equipment and lets groups use its printers to make literature.

If you happen to work for a nonprofit, van Wagner has some advice on how to build a relationship with him and people like him who work at other companies.

Make sure your nonprofit needs to exist. Van Wagner says there has been a proliferation of small nonprofit groups that duplicate efforts already being done by larger, better equipped organizations. “If you start a cause, do it for the right reasons,” he says. “It’s important for folks to ask if somebody else is already doing this, and if we should maybe partner with them, or whether we are addressing a compelling need that’s not already being addressed.”

Be accountable. Decide early on how your charity will measure success, and be prepared to track and measure what you do with donations you receive.

Present a good reason for the company to support you. “Almost everybody has a reason that would make you say ‘that’s a good cause,’” van Wagner says. “I’m not sure I’ve ever seen anybody come in with a proposal that’s not a good cause.” But the more specific a pitch is, the better chance of success it has. Put together a professional letter that explains how much money you are looking for and what exactly you want to do with it. It helps to give the donor options: different things that could be accomplished with different amounts of money.

Know the company you’re dealing with. Companies are more likely to give money to causes that align with their business. For example, a pharmaceutical company is more likely to give money to health-related causes, while a technology company might want to promote education. It also helps to identify the person in charge of charitable giving and contact them directly. “If something comes in and it’s addressed generally to NJM, I’m not saying it immediately gets dismissed, but the odds of it getting dismissed is much higher,” he says. “If you’re writing, make sure to get the name and title correct, and be specific about what you’re looking to do.”

A good way to connect with a company is to start by asking for a meeting just to explain what your group does, and what its story is, before making a request. “Chances are we are going to take the time to listen,” van Wagner says. “Think of corporate support as building a relationship — make a good first impression and then build the relationship.”

Don’t take it for granted. Van Wagner says that once a donation has been made, it’s important to stay in contact with the donor asking them for more money. “Share your success with them,” he says. “Say, ‘here’s what we were able to do with your support.’”

Be transparent. Good news can wait, but bad news should be delivered right away, van Wagner says. If a charity runs into trouble of some sort, the donors probably want to hear it directly from the group, not a newspaper. “Every nonprofit occasionally has issues,” he says. “It’s always better if we know as soon as possible what happened, why, and how you’re dealing with it.”

Use your board. A good board of directors should be able to provide support and guidance to the groups that they oversee, van Wagner says. “They can help you think strategically,” he says.

Van Wagner serves on a number of boards including that of the Rutgers Institute of Ethical Leadership and the Mooch Soccer Foundation. He’s also a volunteer on the Ewing Recreational Advisory Board and several other groups.

He lives in Ewing and is married with two children. He also grew up in Ewing, one of 11 children. His father was a teacher and his mother, a secretary by training, had a full-time job raising double-digit kids. He has worked for NJM since 1983, starting off as an auto claims adjuster and working his way up to an executive role. Starting in 2013 he served a two-year stint leading the state’s newly created Business Action Center.

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